Apple today announced that it is on track to sell its one millionth iPhone before the end of September, and to make iPhone affordable for even more customers this holiday season, it is lowering the price of the most popular iPhone model with 8GB of storage from $599 to $399.

"The surveys are in and iPhone customer satisfaction scores are higher than we've ever seen for any Apple product," said Steve Jobs, Apple's CEO. "We've clearly got a breakthrough product and we want to make it affordable for even more customers as we enter this holiday season."

The 8GB iPhone is available immediately for $399 in the US through Apple's retail and online stores and AT&T retail stores. The iPhone 4GB model will be sold while supplies last.

Can I just buy a cheaper refurb iphone for non-phone use and not activate the phone.
Do you have to activate the phone to use web, music, photos, video?
I guess you do.
I see it mentions ipod function needs phone acivation.

Boy I wish I could write down here in plain English my feelings when I heard of the $200 price drop!
but they are crediting back full diff if within 14 days of purchase and making some restitution for those who have longer._________________Ich hab' keine Lust
Ich bleibe einfach liegen
Und wieder zähle ich die Fliegen

For those who were early adopters, suck it up. You made the choice to buy it at that price. Likely there came a great deal of satisfaction in being one of the first to own such a cool product. Ooohhs, awwwwhhhs the works.

You should be happy for those who can now afford to purchase it. It's going to get into more hands and be more successful. More accessories, software etc will be written for it.

I'll admit that ~ a 35% price reduction for a technology product within 2 months of its introduction is harsh. But nobody forced early adopters (EA's) to buy the iPhone. Let's face it for most people the iPhone is a novelty product. EA's didn't lose $200 in the price reduction, they just lost bragging rights and the likely feel a little stupid.

I just went through the same thing with the PS3. I paid $700 and within 2 months it went down to $500 and you also get 5 free Blu-Ray movies. Do you feel sorry for me? Not likely.

For every EA who is disappointed in the price drop there are 1000's of people who are very pleased. Except Apple stock holders apparently. I'm sure the stocks will rocket back up with a week.

I'm not so sure that the price reduction is a result of poor sales. Early adopters bought... reviews on the product were fantastic. Rather than have iPhone sales lose momentum this will just keep the ball rolling and steam roll competition trying to enter the market place. Apple knows that they have a successful product on their hands. With slim margins it is very risky for the competition to try to enter this market.

I just went through the same thing with the PS3. I paid $700 and within 2 months it went down to $500 and you also get 5 free Blu-Ray movies. Do you feel sorry for me? Not likely.

Don't feel bad. I bought the 20GB PS3 and they discontinued it right after I put the box out on the curb. The same thing happened to me after buying a plasma TV. The price for the same model dropped over $750 three months later. It doesn't make it easier, but this is the price you pay for being an early adopter.

I think Bandit brings some good points about the price reductions. It's too early to know the real reasons. That being said, something sure spooked Wall Street about it. And with that being said, investors usually sell the news after an event like this.

I'm still wondering the reasons for both moves with the iPhone today. Obviously they do their market research before releasing a product. That should have told them that the 8GB was going to sell better than the 4 even with the higher price. Now it should do that much better with the price drop.
I haven't been a hardcore Apple fan for very long like I am now so I didn't used to stay on top of everything they do. Can anyone recall another instance of Apple dropping the price 35% as well as discontinuing a product within 2 months of being released?

Can anyone recall another instance of Apple dropping the price 35% as well as discontinuing a product within 2 months of being released?

No. Apple is notorious for keeping their prices high even when competitive products are much lower. Usuallt the only time they drop the price of a product is right at the end of it's product life-cycle or when a mini update to a product is made.

I'm sure there will be great talk about the question you just asked amongst the internet forums. I would be interested to know of ANY "sucessful" technology product that dropped 35% within 2 months. Only something that was an absolute flop that was discontinued would drop like that to get rid of it.

$599 was apparently the early adopter price.
I don't know if they planned this all along, but how will it effect the next hyped fruit from Apple.
More people may think twice about diving in early if they know in a short while the price will drop ... like an apple.

I'm thinking it may have always been a possible part of the marketing. If we hit a certain sales mark keep it, if we hit a lower mark, drop it and go in aggressively at chestnut roasting time.
or maybe they're worried about the google wi-fi phone which may have almost free service options.

I do think $599 buyers should have gotten something the $399 phone doesn't have, well I guess they did get to be an early adopter.